Ahmadinejad will be sworn in by parliament on Wednesday when the authorities will want to avoid any repeat of the street unrest after the disputed June 12 poll in which at least 20 people were killed and hundreds were detained.

Leading moderates have accused the government of electoral fraud and have already branded the next Ahmadinejad government illegal, and German Chancellor Angela Merkel on Tuesday summed up the position of some Western nations.

In view of the circumstances of the controversial re-election, the chancellor will not, as usual, write the normal letter of congratulation, a German government spokesman said.

The Iranian government says the presidential election was fair and transparent and has accused Western nations, especially Britain and the United States, of being complicit in the bloody post-election unrest, a charge they deny.

Two former presidents, Akbar Hashemi Rafsanjani and Mohammad Khatami, who backed defeated candidate Mirhossein Mousavi, boycotted Monday's endorsement of the president by the Supreme Leader although they were present at such events in the past.

After the ceremony a witness said hundreds of Mousavi supporters, some of them honking car horns, gathered near a central Tehran square, where riot police and Basij militia were assembled to prevent any demonstration.

Karoubi, the most liberal of the presidential candidates who lost to Ahmadinejad, was quoted by the Spanish El Pais daily on Tuesday as saying that he and Mousavi would never capitulate.

Neither Mousavi nor I have withdrawn. We will continue to protest and we will never collaborate with this government. We will not harm it, but we will criticize what it does, Karoubi said in an interview, adding:

Quite honestly, if the authorities had acted in a different way, we would never have had these problems, because the majority of those protesting only did so for that reason.

SERVANT OF THE REVOLUTION

Mousavi's credentials as a loyal servant of Iran's revolution may help explain why he has escaped arrest for leading protests against an election he says was stolen to keep Ahmadinejad in power.

The 68-year-old moderate may lack charisma, but not courage. He has castigated authorities for their handling of the election and its tumultuous aftermath. He has even defied his relative, Supreme Leader Ayatollah Ali Khamenei, who backed Ahmadinejad.

What has endeared him to the public is the fact that contrary to former President (Mohammad) Khatami, who would be reluctant to stand up to Khamenei and others, Mousavi has stuck to his guns, said Mehrzad Boroujerdi, an Iran scholar at New York's Syracuse University.

Mousavi has previously demanded the elections in the world's fifth biggest oil exporter be annulled, but may need a new goal once Ahmadinejad is reinstalled.

The plan should be to call into question the legitimacy of Ahmadinejad's administration at every turn, through civil disobedience, and also to press for some revisions to the constitution, Boroujerdi said.The president now faces the difficult task of assembling a cabinet which is acceptable to the mostly conservative parliament, which may object if he just picks members of his inner circle. Parliament has in the past rejected some of Ahmadinejad's cabinet choices.

The president told rivals on Friday that trying to split him from Khamenei was futile because they were like father and son.

Mousavi has yet to unveil a promised new political front with his reformist and pragmatist allies, perhaps partly because so many leading figures are in jail, including 100 whose trial for inciting unrest began on Saturday and resumes on Thursday.

Mousavi and Karoubi both remain concerned about the killing of street protesters, Karoubi told El Pais, adding Iran's people want a solution to the unrest and stability as soon as possible.

Karoubi backs talks with the United States and other Western governments to attempt to open up the channels of communication with Iran which is locked in dispute over its nuclear program that it says is for energy and the West suspects is for arms.

The most beneficial thing for the Iranians is negotiations. Nobody benefits from our ongoing problems with the United States, said Karoubi, highlighting one of the fissures in the clerical leadership that the election has exposed.

Another potential source of friction with the United States arose on Saturday when Iran arrested three American hikers who an Iraqi Kurdish official said had strayed across the border and who the Iranians are now questioning.

They are definitely Americans. They were detained four days ago. We don't know whether they are tourists or not. We are questioning them, security official Iraj Hassanzadeh told al-Alam state television on Tuesday.